A healthy development for Dracut Lowell officials' reluctance was Genesis of company's decision to come to town

DRACUT -- For a town manager who has focused heavily on spurring Dracut's economic development, Jim Duggan has just obtained his biggest prize yet -- at Lowell's expense.

A $35 million health-care facility, originally slated to be a marquee development for Lowell's Hamilton Canal Innovation District, will now be built in Dracut instead, a major coup for a town that has struggled in the past to attract large companies.

Genesis HealthCare has signed an agreement to purchase a piece of property at 55 Loon Hill Road to build a three-story, 73,000 square-foot, skilled rehabilitation facility at an estimated value of $26 million, while employing 200-220 people, according to an announcement Monday by Duggan.

"I feel thrilled. I feel great," Duggan said Monday, adding that this will have a tremendous impact on Dracut. "The opportunity was there, and we went out and we got it, and that's what we've been doing since day one."

Genesis HealthCare was the first company to submit plans for the still-vacant Hamilton Canal Innovation District, which has struggled to live up to its potential.

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The company was planning to build its facility on prime real estate that Lowell officials describe as a "gateway to the city."

Those officials said Genesis' designs never met expectations, and the company backed away from several aspects of the project that had been particularly attractive to the city.

"We're not settling," Assistant City Manager Mike McGovern said. "We're looking for a signature building, as we will be for any development that comes in there."

Lowell's loss was Dracut's gain. Duggan said he found out about three weeks ago from someone in Lowell that the deal with the city had fallen through. He declined to name who tipped him off.

"So what I did was, I immediately worked through the weekend to contact Genesis and their consulting team, to get them into my office Monday morning," the town manager said, "and that's exactly what happened."

Economic development was a key priority placed on Duggan when he was hired by the town three years ago. The town manager said this project "has the ability to create $377,000 annually" in tax revenue.

Genesis is a Pennsylvania-based, publicly traded company with more than 2,000 facilities in 45 states. It first approached Lowell with its proposal for the Hamilton Canal Innovation District about a year and a half ago. The initial plans called for commercial space on the ground floor and a first-of-its-kind health-care training facility, in partnership with UMass Lowell, on the second floor.

As negotiations progressed, Genesis scaled back the commercial aspect of the project, and the partnership with UMass Lowell never materialized, according to McGovern, Director of Planning and Development Diane Tradd, and City Solicitor Christine O'Connor. That partnership with UMass Lowell will be part of the Dracut facility, however.

The biggest problem, the Lowell officials said, was that the building Genesis was proposing didn't mesh with the city's vision of an iconic symbol of the innovation district.

"When Genesis made a presentation to us, it really was a premier project," said City Councilor Bill Samaras, who chairs the economic-development subcommittee, adding, "What's disappointing is that the project that was promised was never a reality."

Ray Mead, director of construction for Genesis, declined to discuss the specific details of how the Lowell project fell through. He received a call on April 27, he said, from a city attorney who informed him the city manager was no longer interested in it.

"That was shocking to us," Mead said. "I am very, very happy that we found an opportunity in the town of Dracut and are working with great people."

Unlike Genesis' Heritage Nursing Care Center, on Merrimack Street in Lowell, the Dracut rehabilitation facility will cater to patients who come in for regular appointments after debilitating events like surgeries or heart attacks. It will also include space for the training partnership with UMass Lowell. The Merrimack Street facility will remain open.

Genesis' announcement comes three months after Winn Development became the second master developer in as many years to pull out of the $800 million, 13-acre Hamilton Canal Innovation District project.

Winn, which specializes in affordable housing, cited the city's reluctance to accept anything other than commercial space and technology companies in the district.

Despite the recent setbacks, Samaras said he remains confident about the city's selective approach.

"That's the direction that a lot of us do not want to go in -- build anything to get some tax money," he said. "Within the next year, you're going to see some companies that are really good, not only because of the tax base but because they'll encourage other companies to come in."